Mike Archer: It’s a great question, Matt. I don’t have probably a direct answer for you there. But I do think — I mean, we do have certainly a good chunk of our residential portfolio and some on the commercial side, certainly, to your point, that during, I think, it was ’21 and ’22 in particular, we were adding quite a bit on the resi portfolio onto our book at coupons in the 3, 3.5 call it, I do think it will take some time, certainly for those from those coupons to make their way off or just normal cash flow loss. So we will see a bit of compression there. I do think from the long term in terms of those asset yields on the resi side picking up. We are — in terms of the residential mortgages, we are trying to be very prudent in terms of what we put on now, in terms of rates.
That said, rates, as you know, with just a 10-year dropping recently, we’re seeing a lot of competitive pricing in the low 6s. Right now, we’re not there from a pricing perspective on the resi side, but certainly something of an overall pressure and market perspective, that is something that we’re dealing with at the moment. So I don’t know if I answered your question there directly, Matt, but I don’t have the duration piece right in front of me at the moment.
Matthew Breese: Well, I’ll try it another way. There is some optimism there as we get to the back half of the year in rate cuts and assuming that continues into 2025. When do you think Camden can get back to earning an above 1% ROA that we’re all kind of used to?
Mike Archer: Yes. I think it’s — we anticipate the back half of the year, we’re going to see some level of margin expansion even — and I think I made a comment to this earlier, set Fed rate cuts aside, we have $100 million of derivative today on the commercial real estate book that will be falling off, that has been a drag. We anticipate that alone will be somewhere in the neighborhood of 6 to 8 basis points to margin pickup. Then you couple that with just our CD repricing, I think 90 — over 90% of our book CDs reprices over the next year. So we’ll get some benefit there. So it’s continue to reprice. And certainly, we anticipate those repricing down, and then just coupled with the continued investment and cash flow going into higher asset yields and really leveraging our investment book as well.
So we do anticipate our margin picking up. So probably when we think about an ROA north of 1%, we’re probably looking into next year realistically. But I think over the course of the year, we’re making strides in the right direction to get back there.
Matthew Breese: Got it. Okay. Simon, just a couple more for you, if you don’t mind. First of all, welcome, as you’ve kind of spent time with all the various business lines, — just curious, where do you see the greatest potential for change within Camden? And what opportunities or geographies are there that Camden is currently not involved in today, but could be soon?
Simon Griffiths: Yes. Thanks for the question, Matt. Really appreciate it. And I think, look, I think from a growth perspective, I think about it in a couple of ways. I think the existing footprint, I think, offers continued opportunities to deepen our relationships in the Midcoast and down East market. We have obviously high share in those markets, but I think great opportunities to continue to strengthen. See particular opportunities around business banking, I think the wealth business as well is a strong business for us. And I think we’re looking to continue that strength. I think there’s obviously new other markets as well. We have less market share — lower market share in and the southern end, Portland and Portsmouth markets and some of the markets from the southern end, I think, offered great opportunities for us to continue to develop relationships.
We have a strong commercial franchise, as you know, that operates in those markets. And I think we can continue to build out there and again, along the commercial strength that we have and the relationships we have and look to deepen those relationships and particularly on the wealth side. Home equity is another business that interests us and I think is a nice component of our residential business. And I think that’s another area we’re looking at. But I’m excited by the footprint. It’s got some nice opportunities to continue to grow. And one thing I’ve just been struck with, my meeting with colleagues and customers, is just the tremendous partnership that our colleagues, our stakeholders have and the relationships they have in the community, and I think that’s a great foundation for us to build on.
Matthew Breese: I appreciate that. Just the last one is, I would love your perspective on M&A. Historically, Camden, if you look back over the last 20, 25 years, is one kind of a 50-50 or 60-40 mix between organic growth and M&A to drive overall balance sheet growth and that’s probably an older metric at this point, but I think it still holds true over the long term. What are your thoughts on M&A? And is that something that will be part of the repertoire here going forward?
